UK Broadcasters Hope Netflix-style App Will Stop the Rot

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The UK's public service broadcasters (PSBs) have concluded that collaboration is the only way forward if they are to confront the power of global titans like Netflix and Amazon.

This includes a new Netflix-style app aggregating live and on-demand content from the BBC, ITV, and Channel 4-branded part of the Freeview Play platform.

It could eventually be fleshed out to fulfill the broadcasters' long held plans to offer a domestic streaming rival with something close to the scale to compete with the SVOD giants.

A mood of collaboration has been churning among UK PSBs for years but given fresh impetus with a proposal to inject £125 million ($142m) into Freeview Play, the subscription-free connected TV service owned by the BBC, ITV, and Channel 4 along with Arqiva, which owns and operates the nation's transmitter network.

The funds, spread over five years, will develop new services for Freeview Play, the first of which will be a mobile app due later this year that will allow viewers to access live and on-demand content from all the broadcasters on a range of smartphones and tablets.

"This new commitment from our shareholders is a major boost for UK viewers," said Jonathan Thompson, chief executive of Digital UK, which runs the Freeview platform. 

Other key developments include a restart functionality that will allow viewers to click catch-up links within the Freeview Play TV guide to start a show from the beginning, improved voice search navigation, and a "further evolution" of the Freeview Electronic Programme Guide (EPG) on TVs.

Digital UK added that investment will help Freeview adjust to changing viewing habits and "exploit the trend towards cord cutting" as viewers look to build their own TV bundles by combining free-to-view TV with low-cost streaming services.

An original proposal for a joint VOD platform from BBC Worldwide, ITV and Channel 4—dubbed Project Kangaroo—was slated to launch in 2008 but blocked by the Competition Commission, which arbitrates on mergers, joint ventures, and other issues relating to competition law in the UK.

That left the door wide open for Amazon, which acquired UK film streaming and DVD service LoveFilm in 2011, and Netflix, which launched in the UK in 2012. 

Netflix has since amassed 8 million UK subscribers and has an annual war chest for original content that dwarfs that of the BBC. Broadcasters are further braced for the launch of Apple's original content service.

The Guardian reportedin May that NBC Universal had held talks about joining forces to create a joint British streaming service with BBC, ITV, and Channel 4.

Speaking at the DTG Summit in London last month, Ofcom group director and board member Steve Unger said the failure to get a SVOD venture off the ground in 2008 was a "tragedy."

The same organisations apparently also held further discussions in 2016. While the BBC was reportedly keen to use iPlayer as the master brand for a joint SVOD service, what has changed since then is the growing strength of ITV Hub and All 4, and understandable reluctance of the other two main shareholders to commit.

The launch of Freeview Play on mobile may be the compromise.

"The idea that every individual UK broadcaster will have its own, independently produced online player is just not going to happen," said Unger. "I think some form of collaboration around the next generation of collaborative player is really important."

The BBC's annual report, published in March, revealed that 16- to 24-year-olds spend more time with Netflix in a week than with all of BBC TV including the iPlayer. 

"As the trend shifts towards on-demand viewing, the BBC risks being overtaken by competitors," the report noted. "Maintaining the reach and time that audiences spend with our output is difficult when they have so many other choices at their disposal. This challenge is most acute for young audiences."

The BBC director general Tony Hall has repeatedly stated that the whole approach to UK broadcasting needs to change if PSBs are to remain relevant in the near future.

"The global media landscape is going to be dominated by four, perhaps five, businesses on the west coast of America in the years to come," said Hall in speech coinciding with the annual report. "Companies with extraordinary technical, financial, and creative firepower. Does music streaming spell mortal danger to radio? Can iPlayer keep pace with a rapidly growing Netflix?"

Earlier this year, Ofcom chief executive Sharon White urged PSBs to collaborate in to compete but also to co-operate with large digital rivals.

"By working with the likes of Facebook, YouTube, Netflix, Amazon, and Apple, PSBs can benefit from these companies' immense global reach," White said. "They may look to share expertise in technology, marketing and programme-making, in return for investment or prominence on digital platforms."

She added, "Our PSBs may increasingly need to join forces to increase their bargaining power, just as they are doing with TV manufacturers. Increasingly, they will need to collaborate to compete. We will take account of that need when assessing competition in the market."

Freeview Play launched in 2015 and combines catch-up TV with on-demand and live TV on connected TVs. The new app would free the service from the TV. More than 3.5 million devices have been sold with Freeview Play in the UK from brands including Panasonic, LG, Sony, and Toshiba, accounting for 60% of smart TV sales

The 2017 specification for Freeview Play includes support for HDR streaming using the BBC's co-devised HDR format Hybrid Log Gamma.

Commercial broadcasters are also hooking up at a pan-European level to counter FAANG (Facebook, Amazon, Apple, Netflix, and Google) in the advertising space. Germany's ProSieben.Sat1, Mediaset (in Italy and Spain), France's TF1, and Channel 4 have set up the European Broadcast Exchange to trade a combined inventory of 800 million premium video programmatically to brands with multi-territory video campaigns. This has yet to launch.

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